a.g. v. sisi enterprises lmtd

7/28/2019 A.g. v. Sisi Enterprises Lmtd

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IN THE COURT OF APPEAL OF TANZANIA AT DAR ES

SALAAM

(CORAM: RAMADHANI, J.A., MSOFFE, J.A. and KAJI, J.A.)

CIVIL APPEAL NO. 30 OF 2004

THE ATTORNEY GENERAL ...........................APPELLANT

VERSUS

SISI ENTERPRISES LTD ............................RESPONDENT

(Appeal from the judgment of the High Court of Tanzania at Dar es

Salaam)

(Ihema, J.)

dated the 16th day of October, 2003

in Civil Case No. 47 of 2001

JUDGMENT OF THE COURT MSOFFE, J.A:

In Civil Case No. 47/2001 of the High Court of Tanzania at Dar es Salaam the

respondent herein sought, inter alia, a declaratory order that the acquisition of all that piece

of land comprised in certificate of title No. 16395 measuring 21.3 acres and popularly

known as Drive in Cinema, was unlawful.



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The respondent's case was that it was the holder of the land in issue

since 18/6/1966 in a 99 years lease. That, consequent upon being granted the

lease it developed the land by building the complex known as Drive in Cinema.

On 5/6/1999 it signed a letter of intent with the Department of State of the

Government of the United States of America to enter into an exclusive option to

purchase the land at a consideration of USD 3,000,000/=. However, before the

intent could materialize it received a letter from the Commissioner for Lands

informing it that the Government of Tanzania intended to acquire the land under

S. 4 of the Land Acquisition Act, 1967. Inspite of its strong objections to the

intended acquisition, the Government went ahead to acquire the land and

eventually offered it to the Embassy of the United States of America. In return,

the Government offered to compensate it a sum of Tshs.602,363,000/=. The

respondent declined to accept the above sum of money for being inadequate

and accordingly proceeded to file the above mentioned suit.

On the other hand, the case for the appellant herein was that the

acquisition of the land was lawful under the Land Acquisition Act, 1967. That on

16/7/1999 the President vide General Notice No. 469



acquired the land essentially because the respondent had ceased to operate

the Drive in Cinema, and the land was required for a public purpose. And that,

at any rate, the President's intention to acquire the land was published in the

aforesaid Government Gazette on 16/7/1999.

The trial court framed the following issues:-

(1) Whether there was proper and sufficient

notice for acquiring the suit land under the

Land Acquisition Act 1967.

(2) Whether the purpose in which the land

was purportedly acquired is a public

purpose under section 4 of the Land

Acquisition Act 1967.

(3) Whether the proposed compensation

offered by the government is adequate

having regard to all the circumstances of

the case.

After a full trial the High Court, Ihema, J. answered the issues in

the negative. In essence the High Court decided that the acquisition was

not in public interest and no reasonable



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notice was given before the said acquisition. Henceforth, the»

said court ordered compensation of USD 3,000,000 with interest at

market rate under Section 3 (1) (g) (vii) of the Land Act No. 4/99.

This is an appeal against the above decision of the High Court.

There-are four grounds of appeai which read as follows: -

(4) That the trial court erred in law and in fact in

its finding that there was no proper and

sufficient notice in acquiring the suit land

under the Land Acquisition Act, 1967.


its finding that the acquisition was not for

public purpose as provided for under Section

4 of the Land Acquisition Act, 1967.


finding that the compensation of the suit land

be pegged at USD 3,000,000 or its equivalent

in Tanzania shillings for it is on the high side.



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4. That the trial court erred in law in its » finding andgranting interest at the

current commercial rate as provided for

under Section 3 (g) of the Land Act No.

4/99 for at the time of filing the suit this

law was not operative.

At the hearing of the appeal the parties were represented by the-

same advocates who appeared on their behalf at the trial. Mr. Ngwembe,

learned Senior State Attorney, appeared for the appellant. On the other

hand Mr. Bomani, learned advocate, appeared and resisted the appeal

on behalf of the respondent.

We propose to begin with the second ground of appeal. The

crucial Issue here is whether the acquisition for purposes of the

American embassy was in public interest. In his oral submission on the

point, Mr. Ngwembe essentially repeated his earlier submission at the

trial:- That the general public was to benefit from services offered by the

American embassy at the acquired piece of land. With respect, we do not

agree with him that the acquisition was in public interest. We say so for

reasons which will emerge hereunder.



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The starting point is the definition of "public interest/' or "public

purpose" as it is sometimes called. In Stroud's Judicial Dictionary

\ Fifth Edition, Vol. 4 a matter of public interest:

"is that in which a class of the community ha.ve a

pecuniary interest, or some interest by which their

legal rights or liabilities are affected."

In Black's Law Dictionary, Seventh Edition by Bryan A. Garner, "public

interest" means:-

- "1. The general welfare of the public that

warrants recognition and protection.

2. Something in which the public as a whole has a

stake; esp. an interest that justifies

governmental regulation."

Black's Law Dictionary also defines "public purpose" as:-

"An action by or at the direction of a government

for the benefit of the Community as a whole."



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In Ellis V. Home Office (1953) 2 QB 135, Morris LJ. stated:-*

"One feature of the public interest is that

\ justice should always be done and should

be seen to be done."

To come back home, we have the case of Agro Industries Ltd Versus

Attorney General 1994 TLR 43 where this Court cited a head note in B.P.

Bhatt and Another Versus Habib Rajani 1958 EA 536 that to be in the "public

interest":-

"it is not sufficient that public interest may benefit

indirectly or incidentally, if the primary purpose of

the application is to benefit the landlord's interest

and not that of the public."

In Bhatt's case, Law J. relied on the Indian case of Hawabai Franjee Petit

Versus Secretary of State for India 1915 39 BOM 279 where in defining

"public purpose" it was stated:-

"......................the phrase, whatever else it

may mean, must include a purpose, that is to say

an aim or object, in which the general interest of

the community, as opposed to the particular

interest of



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individuals, is directly and vitally concerned."

\ In Agro's case (supra) this court then concluded:-

"So what do we understand by an action being in

the public interest? We think it is so when looked

at objectively with impartial eyes, the action is

primarily and not incidentally in the interest of the

public . . ."

In the light of the above definitions, it is clear to us that "public interest"

or "public purpose" must include a purpose, that is to say an aim or object in

which the general interest of the community is concerned or involved, as

opposed to the particular interest of individuals or institutions.

In the instant case, the .acquisition was made under Section 4 (1) of the

Land Acquisition Act, 1967 which reads:-

"4 (1) Land shall be deemed to be required for a

public purpose where it is required for any of the

following purposes:

(a) for exclusive Government use, for general

public use, for any Government scheme,

for the development of agricultural land or



for the provision of sites for industrial,

agricultural or commercial development,

social services or housing;

(7) for or in connection with sanitary

improvement of any kind, including

reclamations;

(8) for or in connection with the laying out of

any new city, municipality, township or

minor settlement or the extension or

improvement of any existing city,

municipality, township or minor settlement;

(9) for or in connection with the development

of any airfield, port or harbour;

(10) for or in connection with mining of minerals

or oil;

(11) for use by the community or corporation

within the community;

(12) for use by any person or group of persons

who, in the opinion of the President, should

be granted such land for agricultural

development.



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The crucial question here is whether the acquisition and the»

subsequent grant to the US Embassy was within the ambit of the N above sub-

section. In our respectful opinion, the answer is in the negative. The acquisition

did not fit in any of the situations mentioned in the above sub-section. Indeed, the

spirit of the above Act was, and indeed still is, to acquire land for public purpose

and not for any other use. Therefore, the validity of any acquisition under the Act

depends on whether the land is required for a public purpose. In the instant

matter, the acquisition for purposes of the foreign embassy was not in line with

the ''public purpose" or "public interest" envisaged under the Act. We will,

therefore, find nothing to fault the trial Judge in his findings and conclusions on

the point in issue.

We now move forward to consider the third and fourth grounds of appeal

which were argued together by Mr. Ngwembe. The complaint here is threefold:-

One, that it was wrong to invoke the Land Act, 1999 in determining

compensation and interest. Mr. Ngwembe maintained that sub-sections 1 and

2 of Section 12 of the Land Acquisition Act, 1967 were relevant for purposes of

determining compensation and interest. Two, that the decreed sum



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of USD 3,000,000 was on the high side. Three, that it was wrong to enter the

judgment in foreign currency in the light of the decision in ^Continental

Agencies Versus A. C. Berrillo Co. Ltd (1971) EA 205, Mustafa, J.A., that a

Tanzanian court can only enter judgment in Tanzania shillings.

On the other hand, Mr. Bomani was of the general view that both the

Land Acquisition Act, 1967 and the Land Act, 1999 did not apply for purposes of

determining compensation. He urged that the point should be determined on the

basis of the prevailing market value where the criterion should be "willing buyer

willing seller" basis. Hence, in his view, the price agreed by the parties in the

letter of intent would be appropriate compensation in the circumstances. As for

interest, he at first contended that a rate of 31% was pleaded at the trial. On

reflection, he submitted that the respondent would be satisfied with an award of

interest prevailing at the time the judgment was given.

In considering the third and fourth grounds of appeal we think it is

necessary to introduce the subject by making the following observations. One,

since the acquisition was unlawful as we have tried to demonstrate in the

second ground of appeal, de jure the



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respondent remains the lawful owner of the suit premises. De»

facto, however, the embassy of the United States of America has been offered

the land and a new chancery built on it. In the premises, the only realistic and

prudent option for the respondent is to be granted viable and adequate

compensation for unexhausted improvements. Two, in the light of the position

we have taken on the second ground of appeal, it will follow that since the

acquisition was not made under the provisions of the Land Acquisition Act,

1967, then that Act would not apply in determining compensation. Likewise, the

Land Act 1999 would not be relevant because the acquisition took place before

the Act came into force. The acquisition was made on 16/7/1999 and the said

Act came into effect on 1/5/2001 by virtue of G.N. 485/2001.

Pursuant to the above introductory observations, it will now be clear that

market value will be the determining factor. We have considered the rival

positions given by Messrs. Ngwembe and Bomani on the matter. In the end, we

are inclined to go along with the value given by the Government valuer. We do

so not out of disrespect to the valuation report given by the private valuer, PW2

Titus Kalokola. On the contrary, much as we respect the report, we are of the

view



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that justice will demand that we trust more the value given by the Government

valuer than that of the private valuer. In this context, the value of

Tshs.998,467,000/= given by the Government valuer, DW2 Deodatus Kalyanda,

will be fair and adequate compensation to the respondent We further think that

this will be fair compensation given the_factJthat the unexhausted

improvements were on a prime area of the city.

A word about a judgment entered in foreign currency. Mr.

Ngwembe's"contention that a Tanzanian court cannot enter judgment in foreign

currency in view of the decision in Continental Agencies is, with respect, no

longer good law. The current position is as stated by this court in Transport

Equipment Versus Valambhia and another 1993 TLR 91 where it was held,

inter alia, that following the enactment of the Foreign Exchange Act No. 1 of

1992 which came into force on 16/3/1992 as per G.N. 37/92, the principle of law

propounded in Continental Agencies no longer applies in this country.

In view of the position we have taken on the second, third and fourth

grounds of appeal we find no need of discussing the first ground of appeal.



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In the end result, and for the above reasons, we dismiss the appeal on

ground two. As for grounds three and four, we allow it to \ the following extent:-

One, the amount of money due and payable to the respondent as compensation

for unexhausted improvements is Tshs.998,467,000/=. Two, the above sum of

money will attract interest at the commercial rate prevailing at the date of this

judgment. Three, since we have dismissed and partly allowed the appeal, it will

be fair that each party bears its own costs here and the court below.

We so order accordingly.

DATED at DAR ES SALAAM this

15th day of June, 2005.

I certify that this is a true copy of the original.S.A.N. WAMBURA SENIOR

DEPUTY REGISTRAR

a.g. v. sisi enterprises lmtd

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